This week from CEPR: 31 March

Thursday, March 31, 2022

Highlights from some of the latest research reports published in the Centre for Economic Policy Research (CEPR) network’s long-running series of discussion papers, as well as some other recent CEPR publications.

Also, links to some of the latest columns on Vox, the Centre’s policy portal, which provides ‘research-based policy analysis and commentary from leading economists’.

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    ALCOHOL, BEHAVIORAL NORMS AND SEXUAL VIOLENCE ON U.S. COLLEGE CAMPUSES
    Julia Hoefer Marti, Paul Seabright
    CEPR DP No. 17147 | 21 March 2022

    A new CEPR study by Julia Hoefer Marti and Paul Seabright explores the role of social norms in influencing the incidence of sexual assault, and the contribution of alcohol to such events. The authors build a decision theoretic model where agents may use alcohol as a “disinhibitor” to undermine social norms discouraging consensual sexual encounters outside marriage. This makes non-consensual encounters more likely. Stronger norms against consensual sex might therefore increase the incidence of non-consensual sex. The study tests the theory on data from US college campuses, using the presence of Planned Parenthood clinics in the county as an indicator of norms more accepting of consensual sex. Controlling for other factors, colleges in counties with fewer clinics have more incidents of rape and sexual assault in which alcohol is implicated. Colleges affiliated to the National Collegiate Athletic Association also have more such incidents, suggesting that sporting institutions also act as facilitators of a culture of sexual aggression. The authors provide suggestive evidence from attitudinal surveys and from campus religious affiliation that disapproval of consensual sex may indeed be involved. We explore rival explanations such as reporting and selection biases.


    • THE POLITICAL ECONOMY OF LOCKDOWN: Does Free Media Matter? 

    THE POLITICAL ECONOMY OF LOCKDOWN: Does Free Media Matter?
    Timothy J. Besley, Sacha Dray
    CEPR DP No. 17143 | March 2022

    A new CEPR study by Timothy Besley and Sacha Dray studies the role of free media in the responsiveness of governments and the public during the COVID-19 pandemic. Using a panel data of daily COVID-19 deaths, mobility and lockdown decisions for all countries, the research shows that, as the initial number of deaths increased, governments were more likely to impose a lockdown and citizens reduced their mobility. To account for inaccuracies in death reporting, the study simulates deaths from a calibrated SEIR model as an instrument for reported deaths. Using this approach, the authors find that responsiveness to deaths was limited to governments and citizens in free-media countries, and responsiveness account for 40% of the difference in lockdown decision and mobility between free-media and censored-media countries. In support of the role of free media, the study finds that differences in responsiveness are not explained by a range of other country characteristics such as the level of income, education or democracy. The authors also find evidence that citizens with access to free media were better informed about the pandemic and had more responsive levels of online searches about COVID-19.



    HOW TO SOLVE EUROPE’S RUSSIAN GAS CONUNDRUM WITH A TARIFF

    Daniel Gros
    30 March 2022

    Writing at Vox, Daniel Gros makes the case for special import tariff on Russian gas – rather than an outright ban - that would minimise economic disruptions, and have a strong impact on the revenues flowing to Russia.

     

    PROVIDING EDUCATIONAL OPPORTUNITIES WILL BE KEY TO SUPPORTING UKRAINIAN REFUGEES

    Sascha O. Becker 
    29 March 2022

     

    A study by Sascha O. Becker draws on past experiences to argue that the massive Ukrainian refugee flow requires a united response from European countries, including the UK. The research finds that beyond providing shelter and food, the importance of human capital accumulation and access to education for refugees is key. 

    Ultimately, providing timely access to education can be a silver lining of forced migration, allowing refugees to invest in a brighter future.  

       

    HOW SANCTIONS AGAINST RUSSIA COULD BE MORE EFFECTIVE

    Peter A.G. van Bergeijk 
    28 March 2022

    Writing at Vox, Peter van Bergeijk describes how the sanctions against Russia are not “unprecedented” - as many commentators are describing - and neither is the current sanctions packet sufficient to realistically expect that they will work, as sanctions against military adventures have a significantly lower probability of success. 

    The author argues that weak 2014 sanctions against Russia’s annexation of the Crimea reduced the credibility of broad-based EU sanctions and or the threat of scaling up targeted sanctions. The West could do better by including an embargo on capital goods and a boycott of Russian energy.

     

    WHAT HAPPENS IF GERMANY IS CUT OFF FROM RUSSIAN ENERGY?

    Rüdiger Bachmann, David Baqaee, Christian Bayer, Moritz Kuhn, Andreas Löschel, Benjamin Moll, Andreas Peichl, Karen Pittel, Moritz Schularick                   
    25 March 2022

    Germany depends on Russia for about one-third of its total energy consumption. If it is cut off from Russian energy imports, Germany will need to compensate through alternative supply sources. A study by Rüdiger Bachmann et al. shows that the effects of an estimated 30% shortfall of gas supplies are likely to be substantial but manageable, with a GDP decline in the range of 0.5% to 3%.  

    The macroeconomic fallout would ultimately depend on how much the production structure can adjust and how substitutable the imports from Russia are by imports from other suppliers. 


    THE IMPACT OF DISINTEGRATION OF THE GLOBAL TRADING SYSTEM INTO EASTERN-WESTERN BLOCS

    Eddy Bekkers, Carlos Góes                    
    29 March 2022

    The war in Ukraine and the sanctions imposed on Russia have intensified the debate on the potential economic repercussions of a disintegration of the global trading system. Writing at Vox, Eddy Bekkers and Carlos Góes show that a potential decoupling of the global trading system into two blocs – a US-centric and a China-centric bloc – would reduce global welfare in 2040 compared to a baseline by about 5%. Losses would be largest (more than 10%) in low-income regions that benefit most from positive technology spillovers from trade.

    THE LABOUR MARKET DISADVANTAGES FOR IMMIGRANT WOMEN: Lessons for the Ukrainian refugee crisis

    Tommaso Frattini, Irene Solmone                     
    30 March 2022

    Using data from the past two decades on the labour market integration of immigrant women in Europe, a study by Tommaso Frattini and Irene Solmone shows that immigrant women face a double disadvantage determined by both their gender and immigration status, and their labour market outcomes have not improved over time. These disadvantages should be considered when designing policies to increase labour market participation and success. 

    WHY PAYING IN ROUBLES FOR RUSSIAN GAS AND OIL MIGHT MATTER

    Tommaso Frattini, Irene Solmone                     
    30 March 2022

    In response to sanctions imposed on Russia following the invasion of Ukraine, President Putin recently announced that ‘unfriendly’ countries would have to pay for Russian gas (and perhaps oil in the future) in roubles. This column discusses the possible reasons for the announcement and the potential economic and financial implications if Putin were to follow through on it. 


    TODAY’S INFLATION AND THE GREAT INFLATION OF THE 1970S: Similarities and differences

    Jongrim Ha, M. Ayhan Kose, Franziska Ohnsorge
    30 March 2022

    A report generated by a commission of 24 leading economists focuses on three structural challenges for the global economy. Writing at Vox, Olivier Blanchard and Jean Tirole set out some of the conclusions. While the challenges of climate change, inequality and demographic change are significant, solutions – though sometimes expensive or unpalatable – exist.

     

    COVID-19 VACCINES ARE A SHOT IN THE ARM FOR THE ECONOMY

    Niels-Jakob Hansen, Rui C. Mano 
    18 March 2022

    A study by Niels-Jakob Hansen and Rui C. Mano provides evidence that the COVID-19 vaccine rollout in the US increased consumer spending and reduced initial unemployment claims as a share of the labour force. The research shows that the effect of vaccinations has been greater in counties with greater urbanisation, with worse initial socioeconomic conditions, and with lower education levels. The authors suggest that the vaccine rollout added 0.27 percentage points to US GDP growth in 2021 through the direct impact on consumption.


    THE EUROPEAN CARBON BORDER ADJUSTMENT MECHANISM WILL SIGNIFICANTLY CURB CARBON LEAKAGES… BUT AT A COST

    Cecilia Bellora, Lionel Fontagné
    26 March 2022

    Can the European Carbon Border Adjustment Mechanism succeed in reducing carbon leakage, while at the same time restoring a level playing field for EU producers and minimising the likelihood of WTO panels or retaliation by trading partners?

    Writing at Vox, Cecilia Bellora and Lionel Fontagné argue that the mechanism will significantly curb European carbon leakages, but at a cost. EU member states will need at the very least to agree on how to end free allowances to be compatible with the WTO.


    RESIDENTIAL INFLATION: The rise in the pipeline

    Marijn Bolhuis, Judd N. L. Cramer, Lawrence H. Summers
    28 March 2022

    Many believe that the current elevated inflation in the US will subside as a range of factors associated with bottlenecks in the goods sector are alleviated. This column argues that the way that residential services inflation is measured and the characteristics of the housing market kept inflation down in 2021 despite large increases in real-time private sector measures. 

    These past increases ensure an uptick in recorded housing inflation in 2022. The authors project that that residential inflation will peak in late 2022, but it will remain elevated in 2023 and that this could make a substantial contribution to overall inflation.



    THE WTO DISPUTE SETTLEMENT SYSTEM: Why it broke, and how to fix it

    Chad Brown interviewed by Tim Phillips, 29 March 2022

    The US ended the WTO dispute management system in 2019. How can we restore some form of binding dispute settlement, and what are the hurdles that stand in the way?




    WILL UKRAINE'S ECONOMY SURVIVE THE WAR?

    Yevhenii Skok interviewed by Tim Phillips, 25 March 2022

    Are the Ukrainian economy and financial system holding up to Russia's bombardment? Yevhenii Skok tells Tim Phillips whether emergency policies have been able to maintain liquidity and financial stability, how much damage has been done to Ukraine's productive capacity, and what a post-war financial rebuild would look like.